TNAG-0302-FCO40-338-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 150

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enteng the British market;

Comment Again, something of a "crystal ball" factor.

Possibly, if this occurred as DTI hint, there might be

1

a case for investigation of such price-cutting acti-

vities;

(iv) As a result of their restraint agreements on MMF

USA the

with the four Asian suppliers (Hong Kong, Japan, South

Korea and Taiwan) texx might switch production to

non-cotton textiles.

Comment This seems even more hypothetical than the

other factors. While it may be technically possible to

switch machinery from mmf to cotton textile manufacture,

there are considerable management problems (not least

that of effective cost) in so doing; moreover, the sum

of diversion in non-cotton and mmf can be no more than

the possible total unused capacity of the 4 Asian

suppliers as a

nesult of their

agreements with

ments with the USA.

Are the "new factors" sufficient to justify a reversal

now of the tariff policy; and if so, what method should

be adopted

·

15. The DTI consider in paragraph 27-33 of the current

draft submission various options:-

Cotton Textiles

(i) to proceed with the tariff policy;

(ii) to have tariffs and the existing quota system;

(iii)

to monitor imports from developing countries with

a view to taking further restrictive action if parti-

cular sectors came under pressure;

(iv) to continue specific licensing (from 31 March 1972

when it is due to end) for imports from developing

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/countries

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